Stock

A type of security that signifies ownership in a corporation and repsents a claim on part of the corporation's assets and earnings.

There are two main types of stock: common and pferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive pidends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of pferred stock receive pidends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.

Also known as "shares" or "equity".

Taobiz explains Stock

A holder of stock (a shareholder) has a claim to a part of the corporation's assets and earnings. In other words, a shareholder is an owner of a company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the company's assets.

Stocks are the foundation of nearly every portfolio. Historically, they have outperformed most other investments over the long run.